African American Credit, Debit and Prepaid Card Users: Undervalued and Overlooked
Sep 1, 2007
125 Pages - Pub ID: LA1383055
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Chapter 1 Executive Summary
  • Methodology and Scope
  • African American Demographics
    • African American Population Totals 37.5 Million and Growing
    • Multiracial
    • African Americans More Dispersed than Hispanics
    • Foreign-Born Black Population Shows Rapid Increase
    • Incomes of African Americans Continue to Outpace Hispanics’
    • Over 2 Million African American Households Have Incomes of $75,000 or
    • More
    • Aggregate Income of Most Affluent Black Households Reaches $116 Billion
    • and Will Reach $981 Billion in 2010
    • Same Educational Levels But Different Incomes
    • African Americans Influential in Younger Age Groups
    • Females Relatively More Numerous
    • College Enrollment Tops 2 Million, Black Women More Likely to Attend
    • Nearly 4.2 Million African Americans Have Bachelors Degree or More
    • Black Women’s Educational Attainment Outpaces Black Men’s

  • African American Financial Attitudes and Behaviors
    • Life Insurance and Cash are Most Prized
    • Financial Advertising and News Valued
    • African American Financial Attitudes
    • Almost One in Five African Americans Say Their Friends Ask Them for Financial Advice

  • African American Financial Practices
    • Payments
    • Domestic Remittances
    • A lower level of Banking among Blacks
    • Students

  • Unbanked & Underbanked
    • Definitions

  • Discrimination
  • African American Credit Card Use
    • African American Credit Card Use Versus Other U.S. Populations
    • Level of Education Affects Use
    • Personal Income Level Show Similar Pattern to Education
    • A Look at Credit Card Use by Socio-Economic Level
    • A Look at Credit Card Use by Marital Status
    • Link between Life Insurance and Credit Card Use

  • Credit Card Use By Brand
    • The Most Popular Card Brands
    • Popular Non-Bank Cards

  • African American Credit Card Payment Practices
    • Outlook for Subprime Credit Cards

  • African American Debit Card Use
    • Definition of Terms and Forecast
    • Debit Cards Lead Credit Cards in the African American Market
    • The Link Between Cash Preference and Debit Card Use
    • Greater Educational Attainment Means Higher Monthly Debit Card Use
    • Brand Preference

  • Prepaid Cards
    • Prepaid Cards Poised to Break Out
    • Prepaid Debit Poised to Break Out
    • Current Players in the African American Prepaid Card Market
    • Overdrafts
    • Government-Assistance Debit Cards

  • Credit Unions as Conduits
  • Wireless Players
  • Growth and Risk Factors in the African American Credit, Debit and Prepaid Card Markets
    • Growth Factors
    • Hispanic Marketing Fever
    • Very Little Card Marketing Specific to African Americans
    • Potential for African American Affinity, Co-branded Cards, Rewards
    • Programs
    • Establish Partnerships with Other Financial Service Providers
    • Potential of Mobile Payments Technologies Given High Cellphone Feature
    • Use by African Americans
    • Cell Phones Just as Common
    • Need for Partnerships with Media Outlets that Target African Americans

  • Risks
    • Regulatory and Reputation Risks

Chapter 2 Demographic Overview of African Americans

  • Methodology
  • African American Population Totals 37.5 Million
  • Black Population Continues to Grow at Above-Average Rate
    • Table 2-1 Population Growth, African American vs. Other Population
    • Groups, April 2000-2004 (in thousands)

  • African American Population Will Exceed 40 Million in 2010
    • Table 2-2 Projected Population Growth, African American vs. Other Population Groups, 2005 vs. 2010 (in thousands)

  • Self-reporting of Multiracial Status Declines
  • African Americans More Dispersed than Hispanics
    • Table 2-3 States with Largest Black, Hispanic and White Populations,
    • 2004 (in thousands)

  • Fast-Growing African American Populations Found throughout the United States
    • Table 2-4 States with Fastest-Growing African American Populations, 2000-2004 (in thousands)

  • Southern States Have Highest Percentage of African Americans
    • Table 2-5 States with Highest Percentage of African Americans, 2005
    • Foreign-Born Black Population Shows Rapid Increase
    • Table 2-6 Ancestry and Place of Birth of Foreign-Born African Americans, 2004 (in thousands)

  • The African American Community, Financially
    • African American Income Rising Faster than Average
    • Table 2-7 Aggregate Personal and Household Income, African Americans vs. Other Population Groups, 1984 vs. 2004 (in millions)

  • Incomes of African Americans Continue to Outpace Hispanics’
    • Table 2-8 Mean Income of People 15 Years and Over, African Americans vs. Other Population Groups, 2004
    • Table 2-9 Income per Household Member, African Americans vs. Other Population Groups, 1992 vs. 2004
    • Table 2-10 Mean Household and Family Income, African Americans vs. Other Population Groups, 2004
    • Table 2-11 Mean Income of Families by Type, African Americans vs. Other Population Groups, 2004

  • Over 2 Million African American Households Have Incomes of $75,000 or More
    • Table 2-12 Distribution of Total Money Income of Households, African Americans vs. Other Population Groups, 2005 (in thousands)
    • Table 2-13 Distribution of Income of Married-Couple Families, African American vs. All Married-Couple Families, 2005 (in thousands)

  • Aggregate Income of Most Affluent Black Households Reaches $116 Billion
    • Table 2-14 Mean Income and Aggregate of Most Affluent African American Families, 2004

  • African American Buying Power Will Reach $981 Billion in 2010
    • Table 2-15 Projected Growth in African American Buying Power, 2005-2010

  • Same Educational Levels, But Different Incomes
    • Table 2-16 Income in 2005 by Educational Attainment of the Population 18 Years and Over, by Age, Sex, Race Alone and Hispanic Origin: 2006 (in thousands)

  • Age and Gender
    • African Americans Influential in Younger Age Groups
    • Table 2-17 Population by Selected Age Group, African Americans vs. Other Population Groups, 2004 (in thousands)
    • Table 2-18 African Americans as Percent of Total Population by Selected Age Group, July 2004 (in thousands)
    • Females Relatively More Numerous
    • Table 2-19 Population by Selected Age Group, African Americans vs. Other Population Groups, 2004 (in thousands)
    • College Enrollment Tops 2 Million
    • Table 2-20 College Enrollment of the Population 18 Years and Over by Age Group, African Americans vs. All People, 2004 (in thousands)
    • Black Women More Likely to Attend College
    • Table 2-21 College Enrollment of African Americans 18 Years and Over
    • by Age Group and Gender, 2004 (in thousands)
    • Table 2-22 Females as Percent of Total College Enrollment by Age
    • Group, African American vs. All Women, 2004 (in thousands)
    • Nearly 4.2 Million African Americans Have Bachelors Degree or More
    • Table 2-23 Educational Attainment of the Population 15 Years and Over Race and Ethnicity, 2006 (in thousands)
    • Black Women’s Educational Attainment Outpaces Black Men’s
    • Table 2-24 Educational Attainment of Employed African Americans,
    • 18 Years and Over, by Gender, 2005 (in thousands)

  • Health Insurance Coverage
    • Table 2-25 Health Insurance Coverage by Race and Ethnicity, 2005 (in thousands)

Chapter 3 African American Financial Services Attitudes and Practices

  • Life Insurance and Cash are Most Prized
  • Table 3-1 Attitudes Toward Spending Money: Blacks versus Whites, Hispanics and Asians, 2006 (U.S. Adults)
  • Table 3-2 Attitudes Among Blacks Toward Spending Money: By Gender, Marital Status and Educational Attainment, 2006 (African-American Adults)
  • Table 3-3 Attitudes Toward Saving Money: Blacks versus Whites, Hispanics and Asians, 2006 (U.S. Adults)
  • Table 3-4 Attitudes Among Blacks Toward Saving Money: By Gender, Marital Status and Educational Attainment, 2006 (African-American Adults)
  • Table 3-5 Attitudes Among Blacks Toward Spending Money: By Socio-economic Level, 2006 (African-American Adults)
  • Table 3-6 Attitudes Among Blacks Toward Saving Money: By Socio-economic Level, 2006 (African-American Adults)
  • A Love of Life Insurance
  • Credit Cards and Life Insurance
  • Table 3-7 Attitudes Toward Life Insurance: Blacks versus Overall
  • Population, 2006 (U.S. Adults)
  • Table 3-8 Attitudes Toward Life Insurance: Blacks versus Whites,
  • Hispanics and Asians, 2006 (U.S. Adults)

  • A Preference for Cash
    • Table 3-9 Attitudes Toward Paying in Cash: Blacks versus Whites,
    • Hispanics and Asians, 2006 (U.S. Adults)

  • Open to Financial Services Advertising and Interested in Business News
    • Table 3-10 Attitudes Toward Financial Ads and News: Blacks versus
    • Whites, Hispanics and Asians, 2006 (U.S. Adults)

  • A Sense of Greater Financial Insecurity
    • Table 3-11 Sense of Financial Security: Blacks by Gender versus Whites, Hispanics and Asians, 2006 (U.S. Adults)

  • Friends ask for financial advice
    • Table 3-12 Word-of-Mouth Advice on Financial Matters: Blacks versus Whites, Hispanics and Asians, 2006 (U.S. Adults)

  • Aspirational African Americans
    • Table 3-13 Attitudes Toward Financial Success: Blacks versus Whites, Hispanics and Asians, 2006 (U.S. Adults)

  • When the Whole Is Less Than The Sum of the Parts
  • African American Financial Practices
    • Payments
    • Table 3-14a Bill Payment Methods by Race/Ethnicity and Gender, 2006 (U.S. Adults)
    • Table 3-14b Bill Payment Method Indices by Race/Ethnicity and Gender, 2006 (U.S. Adults)
    • Domestic Remittances
    • Table 3-15a Use of Domestic and International Money Remittances: By Race/Ethnicity and Gender, 2006 (U.S. Adults)
    • Table 3-15b Usage Indices for Domestic and International Money Remittances: By Race/Ethnicity and Gender, 2006 (U.S. Adults)
    • Credit Monitoring
    • Table 3-16 Use of Credit Monitoring Services by Race/Ethnicity, 2006 (U.S. Adults)

  • A lower Level of Banking Among Blacks
    • Table 3-17 Use of Financial Services by Type: By Race/Ethnicity, 2006 (U.S. Adults)
    • Table 3-18 Use of Financial Services by Type: By Race/Ethnicity and Marital Status (U.S. Adults)
    • Table 3-18 Use of Financial Services by Type Among Blacks: By Educational Attainment, 2006 (African-American Adults)

  • Students
    • Table 3-19 Use of Educational Loans by Race/Ethnicity, 2006 (U.S. Adults)

  • Unbanked & Underbanked
    • Definitions
    • Table 3-20 The Unbanked, by Ethnicity, 2007

  • Who Are the Underbanked?
    • Table 3-21 Check-Cashing Services* by Bank Status and Ethnic/Racial Group
    • Table 3-22 Types of Financial Services Obtained from Currency
    • Exchanges*
    • Table 3-23 Reasons for Not Having a Checking Account*

  • Discrimination
    • Automotive Loan Mark-Ups
    • Table 3-24 Comparison of Subjective Markup Charged to African-American versus White Borrowers Five Captive Auto Lenders
    • Subprime Mortgages
    • A history of discrimination, not surprisingly, breeds distrust.

    Chapter 4 African American Credit Card Use and Brand Preference

    • Current Credit Card Market
    • African American Credit Card Use Versus Other U.S. Populations
      • Table 4-1 Overview of Credit Card Use by Race or Ethnicity, 2006 (U.S. Adults)
      • Table 4-2 Frequency of Credit Card Use by Race or Ethnicity, 2006 (U.S. Adults)
      • Table 4-3 Monthly Number of Credit Card Transactions by Race or
      • Ethnicity, 2006 (U.S. Adults)

    • Level of Education Affects Use
      • Table 4-4 Credit Card Use by Educational Attainment: Blacks vs. Overall Population, 2006 (U.S. Adults)
      • Table 4-5 Monthly Number of Credit Card Transactions by Educational Attainment: Blacks vs. Overall Population, 2006 (U.S. Adults)

    • Personal Income Level Show Similar Pattern to Education
      • Table 4-6 Overview of Credit Card Use, by Individual Employment Income: Blacks vs. Overall Population, 2006 (U.S. Adults)

    • Household Income Same Pattern, Lower Penetration
      • Table 4-7 Overview of Credit Card Use, by Household Income: Blacks vs. Overall Population, 2006 (U.S. Adults)
      • A Look at Credit Card Use by Socio-Economic Level
      • Table 4-8 Overall Credit Card Use, by Race or Ethnicity: By
      • Socio-Economic Level, 2006 (index)
      • Table 4-9 Monthly Credit Card Use, by Race or Ethnicity: By Socio-Economic Level, 2006 (percent)

    • A Look at Credit Card Use by Marital Status
      • Table 4-10a Overall Credit Card Use by Race or Ethnicity: By Marital
      • Status, 2006 (percent)
      • Table 4-10b Overall Credit Card Use by Race or Ethnicity: By Marital
      • Status, 2006 (index)

    • Link between Life Insurance and Credit Card Use
      • Table 4-11 Credit Card Use Among Life Insurance Policyholders by Race
      • or Ethnicity, 2006 (percent)

    • The Most Popular Credit Card Brands
      • Table 4-12 Overall Credit Card Brand Use, Bank Cards: Overall Population vs. Black Population and Percentage of Total Black Users, 2005

    • Few Black Singles Own Credit Cards
      • Figure 4-13 Credit Card Types Owned by Singles: By Race/Ethnicity (percent)

    • Popular Non-Bank Cards
      • Table 4-14 Overall Credit Card Brand Use, non-Bank Cards: Overall Population vs. Black Population by Total Black Users, 2006

    • African American Credit Card Payment Practices
      • Table 4-15 Credit Card Payment Practices, Pay All of Their Balances by Race or Ethnicity, 2006
      • Table 4-16 Credit Card Payment Practices, Make Minimum Payment by
      • Race or Ethnicity, 2006
      • Table 4-18 Credit Card Payment Practices, Make No Payment by Race or Ethnicity, 2006

    • Industry Outlook for Subprime Credit Cards

    Chapter 5 African American Debit Card Use and Brand Preference

    • Figure 5-1 Projected U.S. Market for Debit Cards, 2005-2010 (in billions of dollars)
    • Debit Cards Lead Credit Cards in the African American Market
      • Table 5-1 Comparison of Debit Card and Credit Card Use by Race or Ethnicity, 2006 (U.S. Adults)
      • Table 5-2 Monthly Frequency of Debit Card Use by Race or Ethnicity, 2006 (U.S. Adults)

    • The link between cash preference and debit card use
      • Table 5-3 Debit Card Use by Race or Ethnicity Based on Preference for Cash (Any Agree), 2006 (U.S. Adults)
      • Table 5-4 Monthly Number of Debit Card Transactions by Race or Ethnicity, 2006 (U.S. Adults)
      • Table 5-5 Debit Card Use by Educational Attainment: African Americans vs. Overall Population, 2006 (U.S. Adults)
      • Table 5-6 Monthly Debit Card Use by Educational Attainment: African Americans vs. Overall Population, 2006 (U.S. Adults)
      • Table 5-7 Overall Debit Card Use by Socio-Economic Level: African Americans vs. Overall Population, 2006 (U.S. Adults)
      • Table 5-8 Monthly MasterCard Debit Card Use by Socio-Economic Level: African Americans vs. Overall Population, 2006 (U.S. Adults)
      • Table 5-9 Monthly MasterCard Debit Card Use by Gender: African Americans vs. Overall Population, 2006 (U.S. Adults)

    • Gender Gap Explained
      • Table 5-10 Preference for Cash by Race and Gender, 2006 (U.S. Adults)
      • Table 5-11 Make own payments by Race and Gender, 2006 (U.S. Adults)
      • Table 5-12 Debit Card Use by Race, Gender and at least 10 Shopping Trips a Month, 2006 (U.S. Adults)

    • Brand Preference
      • Table 5-13 The Most Popular Debit Cards by Brands: African Americans vs. Overall Population, 2006 (U.S. Adults)

    • Life Insurance and Debit Cards
      • Table 5-14 Debit and Credit Card Use among African American Life Insurance Policyholders, 2006 (index)

    Chapter 6 African American Prepaid Debit Poised to

    • Break Out
      • Market Size
      • Packaged Facts Predicts $200 Billion on Prepaid Debit Cards in 2011
      • Table 6-1 Prepaid Debit Card Market 2003-2011 (in billion $)

    • Prepaid Debit Poised to Break Out
    • Current Players in the African American Prepaid Card Market

  • Pricing
    • Table 6-2 General Spending Prepaid Card Pricing
    • Table 6-3 Average Prepaid Cardholder Transactions

  • Overdrafts
  • Government-Assistance Debit Cards
  • Credit Unions as Conduits
  • Wireless Players

    Chapter 7 Growth Factors and Risks in the African American Credit, Debit and Prepaid Card Marketplace

    • Growth Factors
    • Hispanic Marketing Fever
    • Very Little Branded Card Marketing Specific to African Americans
      • Table 7-1 AMEX and Visa Signature Card Use by African Americans in Socio-economic Level I, 2006 (index)

    • Potential for African American Affinity, Co-branded Cards, Rewards programs
    • Establish Partnerships with Other Financial Service Providers
    • Potential of Mobile Payments Technologies Given High Cellphone Feature Use by African Americans
      • Figure 7-1 Annual Expenditures on Telephone Services, African Americans vs. All Consumers

    • Cell Phones Just as Common
      • Figure 7-2 Ownership and Use of Cell Phones, African Americans vs. All U.S. Adults by Gender
      • Source: Simmons Market Research Bureau, Spring 2005 National Consumer Survey; compiled by Packaged Facts
      • Table 7-2 Use of Cellular/Wireless Services, African Americans vs. All U.S. Adults by Gender
      • Table 7-3 Use of Telephone Services, African Americans vs. All U.S. Adults by Gender
      • Table 7-4 Use of Telephone Credit Cards, African Americans vs. All U.S. Adults by Gender

    • Pilot Projects
    • Domestic Remittances by Wireless
      • Barriers to Mobile Financial Services Adoption

    • Need for Partnerships with Media Outlets That Target African Americans
      • Table 7-5 Attitudes toward Magazines, African Americans vs. All U.S. Adults by Gender
      • Table 7-6 African American Attitudes toward Television by Gender
      • Table 7-7 Impact of the Internet on African American Media Use, by Gender

    • Risks
      • Regulatory and Reputation Risks

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